Freshii makes pitch to lure franchisees from Subway
TORONTO — Freshii has made an ostentatious bid to lure franchisees away from rival Subway as it looks to more than triple its footprint over the next two years.
Matthew Corrin, founder and chief executive officer of the Toronto-based restaurant chain, released an open letter Tuesday to Subway franchisees with a “sincere proposal” to convert some of their submarine shops into Freshii outlets.
“This is not a takedown,” Corrin said in an interview.
Subway, which operates more than 44,000 restaurants in 112 countries, could prosper if it unloaded 14,000 locations, Corrin said.
He estimates willing franchisees can make the switch for $75,000 US per store.
“What that requires is Subway’s blessing,” he said.
Subway, a private company headquartered in Milford, Conn., did not respond to a request for comment Tuesday.
As of Sept. 25, 2016, Freshii had 244 stores in 15 countries, according to financial documents. In February, a month after it went public, Freshii announced it would enter the United Kingdom in its efforts to grow to 840 locations worldwide by the end of 2019.
Freshii and Subway operate on similar business models, appealing to health-conscious diners who want food on the run. But Corrin says Subway, founded more than 50 years ago, has lost relevance in the hypercompetitive food retail sector.
“Freshii is probably the healthy fast-food option for this generation,” he said.
“Subway was the healthy fastfood option for, you know, generations before us.”
The unique pitch comes at a time when Subway has found itself fighting reports by the CBC that said samples of its chicken products based on testing showed that they contained, on average, between 42.8 and 53.6 per cent chicken DNA. Subway has disputed the reports.
It also comes ahead of Freshii’s first financial report this week. The company debuted on the Toronto Stock Exchange in January after a $125-million initial public offering of its stock.
Corrin said he is confident he’ll hear from Subway soon and the two parties will enter into serious conversations on his proposal.